Globalfoundries: Europe 'fundamentally flawed' on manufacturing

SAN FRANCISCO--Europe has its priorities misplaced when it comes to manufacturing, according to Globalfoundries CEO Ajit Manocha.

Manocha said there is a “fatal flaw” in the European Commission’s thinking when it comes to technology, with the organization putting all of its focus and resources into innovation while neglecting manufacturing.

Manocha said the only thing keeping European manufacturing afloat was the automobile industry, which continued to fuel growth, but that if Europe did not start taking more initiative in other manufacturing areas, Asia would continue to see its manufacturing prowess boosted.

“The benefit of European demand won’t be felt unless Brussels begins to put some emphasis on manufacturing,” he said, adding “Europe is not playing its role properly.”

Manocha said Asian countries rolled out “the red carpet” for foundries in terms of subsidies and facilitating business. Meanwhile, despite frequent meetings in Brussels, Manocha said he feels he is not making headway.

Yes, companies will put their manufacturing where they can get the best return for the investment. As long as the corporate tax is higher in Europe, Asia will continue to grow as the manufacturing center of the world.

The US is safer bet for wafer fabs in my opinion since they involve huge capital investments, are mostly automated, and need a few PhD EE's and IE's and a specially trained crew of tool maintenance technicians (perhaps trained by the tool vendors or even managed by tool vendors). Moving inland from the two coasts has proven safer and cheaper.
And the smart money will invest in US for fabs, and Asia for final manufacturing and test, as in the 80's. Fab Automation makes that best mix in my opinion seeing that chips are tiny things that can be shipped anywhere, but $10billion fabs are safer here that in many locales (as is the IP involved in the design-process integration).